Four Steps to paying off your loan faster

Fixed and variable rate home loans vary in the amount of flexibility they give you to pay your loan off faster. Here are some options that you may be able to use (depending on the type of loan you have) to pay your home loan off faster and reduce the amount of interest payable:

Make fortnightly or weekly repayments that equal your monthly commitment

This simple technique means you effectively make 4 weeks additional payments per year, reducing the amount against which you pay interestc

Pay more than the minimum repayment

Even small amounts can make inroads into the term and balance of your loan.

Have your salary paid directly into your loan account

From the minute you credit your mortgage account with your salary, you’ll be saving interest and reducing the time it takes to pay off your loan. Because interest is calculated daily this can shave years off the loan term and save thousand of dollars

Lump sum payments

Tax returns, gifts, inheritance, lotto wins, dividends, sale of other assets, bonuses, you name it, putting any extra money into your mortgage rather than leaving it in your bank account further reduces the interest charged on your home loan.